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Litecoin -- A Fast Look at What You Need to Know Now

Nobody actually knows who created bitcoin ("Satoshi Nakamoto"?), but we do know that Litecoin was created by Charlie Lee, a Google alumni, in 2011. His intent was to create an easier-to-use version of bitcoin. Litecoin is very similar to Bitcoin. If bitcoin is gold, then litecoin is silver.

Litecoin is the best candidate to become the bitcoin alternative that eventually eclipses Bitcoin's market cap. Some industry observers believe that it's just a matter of time before Litecoin overtakes Bitcoin.

In 2017, cryptocurrencies grabbed global media attention with the greatest single-year performance of any asset class in history. Cryptocurrencies started 2017 with an aggregate market cap of $18 billion and finished 2017 with a market cap of $613 billion -- a 3,300% gain. Also in 2017, there was a clear bifurcation in purpose among cryptocurrencies between those that are focused on the development of blockchain technology for use cases outside of currency, and the rest, which are, first and foremost, or perhaps exclusively, meant to be used as money -- a “medium of exchange”. Bitcoin and Litecoin aim to take the role of money, with Litecoin catching up with Bitcoin because Litecoin’s transaction processing speeds are faster and Litecoin transaction fees are less costly.

Bitcoin transactions that take an hour to process are still ok when we're talking about cross-border remittances, where banking systems take five business days to clear. But Litecoin's faster transaction processing time is much better for small local transactions. Because of this advantage, Litecoin looks to have a clear path to becoming the go-to medium of cryptocoin value exchange over time. This doesn't necessarily mean that the Litecoin coin itself will increase or even hold its value.

There is no fundamental reasoning behind cryptocurrency valuations today, so even if it overtakes bitcoin, don’t simply assume that the value of each Litecoin will go up. Like any cryptocurrency, investment in Litecoin is still very risky regardless of all you just read above.

Litecoin is included in all the recently formed cryptocurrency index funds. This bodes well for its survival and value. Here are two examples:

Coinbase's new index fund is weighted by the market capitalization of each coin on its exchange: Bitcoin 62%, Ethereum 27%, Bitcoin Cash 7%, and Litecoin 4%.

Here is a tweet from last November, in which Charlie Lee attempted to explain the relationship between bitcoin and Litecoin with a reference to the cartoon Dragon Ball Z: "Bitcoin is Goku, the all-powerful protagonist, while Litecoin is Vegeta, less powerful but still hugely important rival turned ally. Goku inspires Vegeta to achieve his full potential. And together they are better than the sum of their parts.”

Now that we've covered the Litecoin big picture, let's look at its recent price fluctuations.

Litecoin's $12 billion market cap places it fifth among the largest cryptocurrencies. Litecoin is currently at a high risk/high potential reward juncture for traders. A significant minority of analysts believe Litecoin is undervalued.

Litecoin investors recently enjoyed a price spike stemming from the Litecoin Cash hard fork, but prices fell back as cryptocurrencies recently suffered widespread declines. Litecoin transaction volumes and transaction fees are now much lower, with the lower values of both metrics mirroring the drop in LTC price itself.

Cryptocurrency trader Marius Rupsys described the market for the biggest coins as being "sideways and bearish" as of late. Reduced trading volume made the big coins more vulnerable to the impact of the recent bad news rumor that cryptocurrency exchange Binance was hacked.

LTC was solidly up for most of February, reaching $250+ on Feb. 20. Following the litecoin cash (LCC) hard fork, the bull run fell apart as the price fell to $182 on Feb. 23. LTC price range narrowed, forming a series of lower highs and higher lows.

Josh Olszewicz, writing for Brave New Coin, noted that "The network value to transactions ratio is among the lowest in the market, with only Dogecoin and Cardano showing a lower ratio. Although this figure is hard to compare across cryptocurrencies, it gives a rough guide as to how much a token is being used against its current valuation."

Pedro Bernardo, writing for Oracle Times, said that, "The latest Litecoin Core update showed the team’s dedication to future development. New fixes included the banning of duplicate wallets, alterations in network safety measures, and a reduction in the minimum relay fee. Right now the market is experiencing another dip which to me is fine, since in reality it represents another opportunity to buy your favorite coins at a discount. With that said, it may very well be the last time you see Litecoin under $200.”

During the expected official launch day of LitePay, a highly-anticipated Litecoin payment system that has been slow out of the gate, LitePay claimed that its consumer debit card was still on hold due to “the negative perception and drastic actions card issuers have towards cryptocurrency companies.” Litecoin enthusiasts on Reddit posted many negative comments and questioned LitePay’s cumbersome merchant registration process.